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Interest only mortgage cash-out refinance with high LTV

Do lenders offer interest only mortgages for a cash-out refinance based on an LTV ratio of 80% and borrower credit score of 625 - 650?

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

Your request is challenging but may not be impossible. The issue is that there are fewer lenders available with each one of the lender search criteria you apply. For example, a relatively small number of lenders offer 7/1 interest only mortgages. Interest only mortgages used to be popular before the real estate market collapse but are less common now due to regulator changes. An even smaller number of lenders offer interest only mortgages for cash-out refinancings. Additionally, if you can find a lender that offers an interest only mortgage for a cash-out refinance they may apply a maximum loan-to-value (LTV) ratio of 70% - 75% which is below the 80% LTV ratio you are seeking. Finally, even fewer lenders will provide an interest only cash-out refinance for borrowers with a credit score of 625 - 650. Most lenders we are familiar with require a minimum credit score of 680 - 700 to qualify for an interest only mortgage. Given the issues outlined above, I think it will be highly challenging to find a lender that offers an interest only cash-out refinance based on an LTV ratio of 80% and a borrower credit score of 625 - 650; however, you may have a lender option or two.

Despite potential obstacles, we recommend that you use our INTEREST RATES function to contact local lenders to discuss your unique situation. You can use the "Refine Your Search" menu on our rate tables to customize your mortgage search based on your specific criteria for loan amount, mortgage program, LTV ratio and credit score. For example, a search of lenders in your state that offer 7/1 interest only refinance mortgages for borrowers with a credit score of 625 - 650 yields one lender. We encourage you to use the rate tables to evaluate multiple mortgage options based on different mortgage search criteria. This function will help you find the mortgage that is right for you and is free to use, like everything on FREEandCLEAR.

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Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click for more information on rates and product details.

About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

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